The Traumatic Birth of Health Reform

July 24, 1994|Kevin Phillips | Kevin Phillips, publisher of American Political Report, is the author of "The Politics of Rich and Poor." His new book, "Arrogant Capital: Washington, Wall Street and the Frustration of American Politics," will be published in September

WASHINGTON — The collapse of Bill Clinton's far-reaching blueprint for a government-orchestrated national health program into much lesser legislation can be described best as: a) a historic achievement, nonetheless; b) a tragedy for the middle class; c) so much of a political face-saver that we'd be better off starting over, or d) all the above?

Take your time, because economists and historians will be debating this for years. But "all the above" does have a certain resonance. Important legislation may still be enacted. But, even so, Clinton's initial commitment to comprehensive health-care reform will go down as a major strategic miscalculation--perhaps the biggest since Jimmy Carter declared the energy challenge was the moral equivalent of war (only to learn it wasn't, and that the acronym was "MEOW"); and since George Bush told voters, "Read my lips, no new taxes."

As for whether this presidency, too, is failing, there are reasons to worry about fundamental flaws in Clinton's style of governing: his press-the-flesh, eager-to-please, people-oriented style is not suited to effective U.S. or world leadership; and his co-presidency with wife Hillary Rodham Clinton, which has so much staked on health reform, may already be crumbling.

While potential face-saving compromises are still in the offing, few observers still believe that Clinton has a major historic or political triumph on the horizon. The real question--reinforced by the nation's deepening disillusionment with the original Clinton plan--is whether Congress wouldn't be better off starting over next year instead of passing a patchwork mishmash that may still contain critical flaws.

Consider how five major circumstances explain why the Clinton blueprint was flawed from the start and why any patchwork compromise is also risky:

* Biting Off Too Big a Chunk of the Economy. As his reforms unfolded last year, Clinton paid too little attention to economic history. Between 1980 and 1992, the health sector's share of U.S. gross national product mushroomed from 8% to 15%. The only parallels to this were the growth of railroads in the decades after the Civil War and the rise of the huge U.S. aerospace and defense complex during and after World War II. And no Washington whiz-bang ever tried to reshape those two with grand national legislation at the peak of their power. The U.S. economy is too complex.

So huge was the health sector's rise in the early 1990s that health was frequently providing 10% to 40% of quarterly GNP growth. In Pittsburgh, health replaced steel as the biggest employer; and in economically crippled Southern California, health was one of the few sectors adding jobs. Trying to stop ballooning health-sector inflation was important, but Clinton simply tried to reform too big a chunk of the economy by government fiat.

* Expanding Social-Welfare Programs in an Era of Welfare State Decline. Here's a second strategic flaw. By 1993, the health component of the welfare state was in retreat from Australia to Canada to Western Europe. Weak economies could no longer afford their existing health-care burdens, and new benefits could only be added at the cost of curbing others.

Politically, health was turning into a zero-sum game. Somehow, the President failed to grasp two essential points: first, that with the welfare state shrinking in most Western nations, the health-care proposal involved the equivalent of going up a down staircase; and second, in virtually none of these nations were health-care issues helping the incumbent government.

* Fallibilities of Clinton's Own Leadership. The new President also brought a crippling personal predilection to the health debate. In the past, his method for success was a high-octane mixture of high intelligence and expert people skills--his warm and personal touch in "retail politics." This allowed him to be a successful big fish in the little pond of Little Rock, despite a tendency for disorganization.

Clinton didn't know grand strategy, because he didn't have to--in small Southern states, politics is a matter of personality and networking. His success had always been in thinking tactically--short-term, quick deal-making as opposed to long-term strategy in pursuit of far-ranging goals.

Because a U.S. President must be a big fish in a big pond, voters had previously declined to elect anyone from one of the nation's smallest states--not since Franklin Pierce of New Hampshire in 1852. Unfortunately, Clinton's Little Rock little pondsmanship gave him an arrogant belief in his own skills and charm that turned out to be misleading when it came to national affairs and issues. Miscalculations have flourished.

A second unfortunate Arkansas hangover is that Clinton also thought he could re-establish in Washington the sort of co-rulership with his wife that they carried out in their Arkansas web of governing and politicking. Health care was to be the test.